Max is plannin to buy a house. After some negotiation, Max agrees to pay $500,000 for the house. Being short of cash, Max is going to take a 30-year monthly compounding mortgage from his bank with an APR of 6%. The bank is willing to lend 80% of the house price to Max if Max can pay for the rest 20% of the house price and closing cost (5% of the loan amount) with cash.

1. What is the monthly payment?

$2,398.20

$2,997.75

$1,599.55

$2,278.39

$3,308.22

2. How much of the SECOND payment is toward principal?

$997.75

$2,000

$398.20

$400.19

$278.39